In contrast to the US and Asia, the economic recovery in Continental Europe has been somewhat muted. Of particular concern has been the excessive levels of government debt being held by certain countries in southern Europe; most notably Greece, Spain and Portugal.
The recent ratings downgrades of all three countries by S&P has also reinforced the risk of contagion to other highly indebted countries and exacerbated fears several more European nations could be moving closer to default. Against this backdrop the euro has also continued to depreciate against the dollar, with investors remaining concerned about the inflationary impact of any bailout, and the future of the euro. In April 2010, European stock markets reflected these macro trends, with the FTSE Europe ex-UK index returning -1.4% and -4.0% in euro and sterling terms respectively. Europ...
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